Reserve Bank of

India
 Historical Background
 Established on April 1, 1935 with the
enactment of the Reserve Bank of
India Act, 1934.
 In it’s early years, the Reserve Bank
was a shareholder’s institution.
 The Bank started functioning as a state
owned institution from 1st June, 1949.
 The Preamble
 According to the preamble of the
Reserve Bank of India Act, the basic
function of the bank is to “regulate
the issue of Bank notes and keeping
of resources with a view to securing
monetary stability in India and
generally to operate the currency and
credit system of the country to its
advantage.”
 Currency Authority
 It is the sole authority for the issue of
currency in India – responsible for
issuance and distribution of currency
notes.
 Maintenance and operation of currency
chests throughout the country.
 Recent developments – coinisation, ‘Clean
Note Policy’ – improving supply of notes,
mopping up of soiled notes, eco-friendly
and fast processing of notes through
CVPS.
 Banker to Government
 The Reserve Bank acts as the banker to
the Central Government as well as
State Governments.
 Holding and maintenance of the Govt.’s
principal accounts.
 Providing services like acceptance of
money on Govt. account, payment
and withdrawal of funds through
different means.

 Public Debt Management
 The Reserve Bank issues new loans on
behalf of Central and State Govt.
 Raising resources from the market,
Open Market Operation (OMO), and
overdrafts.
 The Bank formulates the borrowing
programme for the year for the Govt.
 Instruments involved are Treasury Bills,
Govt. securities, Gilt funds, etc.

 Monetary Regulation
 The Reserve Bank formulates and
administers the monetary policy.
 Influences the level of aggregate
demand for goods and services in
order to ensure price stability and
growth.
 Instruments of monetary control – Cash
Reserve Ratio (CRR), Statutory
Liquidity Ratio (SLR), Bank Rate, etc.
 Regulation & Supervision of
Financial Intermediaries
 The Reserve Bank regulates the
licensing of banks, branch expansion,
liquidity of their assets, management
and methods of working,
amalgamation and reconstruction,
etc.
 Supervision is done through on-site
inspections as well as off-site
monitoring system (OSMOS).

 Exchange Management &
Control
 The Reserve Bank is the custodian of
the country’s foreign exchange
reserves – responsible for managing
the investment and utilization of the
reserves; and foreign exchange
transactions with the public through
Authorised Dealers (ADs).
 The Bank ensures the external stability
of the currency by maintaining the
rupee’s external value.
 Developmental Role
 Priority sector lending - agriculture,
small enterprises, retail trade, micro
credit, education loan and housing
loan.
 Government sponsored schemes –
IRDP, SGSY, PMEGP, SJSRY, SRMS,
NREGS, DRI.
 Lead Bank Scheme (LBS), Service Area
Approach (SAA), Regional Rural Banks
(RRBs), Local Area Banks (LABs), etc.
Organisation Structure of
RBI
 Rural Planning and Credit
Department (RPCD)
 Credit delivery innovations – micro
finance initiatives, KCCs, etc.
 Restructuring cooperatives
 Framing guidelines for rehabilitation of
sick SSIs.
 Most recent move – Financial
Inclusion and Financial
Literacy.



 Financial Inclusion
 Financial inclusion is the “process of
ensuring access to financial services
and timely and adequate credit where
needed by vulnerable groups such as
weaker sections and low income
groups at an affordable cost”.
 In this regard, RBI Ranchi has
envisioned 100% financial inclusion in
all the 24 districts of the state of
Jharkhand.

Present Scenario in Jharkhand
 The State has a network of 1661 bank
branches.
 There is 1 bank for every17,418 people
in the State and this number varies
from as low as 12,241 to a maximum
of 26,550 in the Garhwa district.
 More than 12 districts are still lagging
behind the State average in terms of
access to the formal banking system.

 Initiatives Undertaken to
Promote Financial Inclusion
 Govt. sponsored schemes
 Self Help Groups (SHGs)
 No Frill Accounts
 Relaxation of KYC norms
 Kisan Credit Cards (KCCs)
 BC/BF Model for doorstep banking
 Credit Counselling Centres & RUDSETIs
 http://rbi.org.in/financialeducation/
Thank You